Tuesday, 4 October, 2022
HomeEconomyShunted to power ministry, finance secretary Subhash Garg opts for voluntary retirement

Shunted to power ministry, finance secretary Subhash Garg opts for voluntary retirement

Subhash Chandra Garg, moved to power ministry Wednesday, was behind the budget announcement to raise funds from sovereign bond issuance overseas.

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New Delhi: Subhash Chandra Garg, the senior-most finance ministry bureaucrat who was shunted out to the power ministry by the Narendra Modi government Wednesday night, has opted for the voluntary retirement scheme, government sources told ThePrint.

Later in the evening, Garg tweeted confirmation that he had applied for voluntary retirement.


Garg, a 1983-batch Rajasthan cadre IAS officer, has 15 months left in his tenure. He took over as the secretary, Department of Economic Affairs, in June 2017 and was designated the finance secretary as recently as March 2019 by the appointments committee of the cabinet.

He was due to retire in October 2020.

Garg was behind the controversial sovereign bond issue

Garg was at the forefront of the government’s budget announcement to raise funds from sovereign bond issuance overseas — a move that has been criticised by many including former RBI governors Y.V. Reddy and Raghuram Rajan and members of the Prime Minister’s Economic Advisory Council Rathin Roy and Shamika Ravi. Some also flagged the near unilateral way the proposal was introduced.

The move was also criticised by the RSS-affiliated Swadeshi Jagran Manch, with detractors pointing out that raising funds through this route makes India vulnerable to fluctuations in currency markets and increases external sector risks.

With Garg moving out, the government may put the controversial decision to raise sovereign debt overseas on the back burner.

Also read: NBFCs will soon be out of the woods as funds flow eases, economic affairs secretary says

On Bimal Jalan committee

Garg was also the government’s representative in the Bimal Jalan committee looking into the transfer of excess reserves of the Reserve Bank of India to the government. Garg had been pitching for a one-time transfer of the reserves, a move that was not backed by the rest of the panel that eventually opted for a phase-wise transfer of RBI’s resources.

Garg did not attend at least two of the meetings and is said to have left before the last meeting of the panel concluded. The amount of the transfer is also likely to be much less than the Rs 3 lakh crore estimated by the department of economic affairs under Garg.

Not new to controversy

Garg has been one of the most vocal bureaucrats who did not shy away from expressing his disagreement with the central bank last year when both the government and the Urjit Patel-led RBI were at loggerheads over many issues.

Garg had sarcastically tweeted in response to former deputy governor Viral Acharya’s warning that governments that don’t respect the central bank’s independence face the wrath of the markets.

“Rupee trading at less than 73 to a dollar, Brent crude below $73 a barrel, markets up by over 4% during the week and bond yields below 7.8%. Wrath of the markets?” his tweet read.

Finance secretaries have been shunted out to other ministries in the past but that has typically been after a new government assumes power. For instance, Arvind Mayaram, finance secretary in the Congress-led UPA government, was transferred to the minority affairs ministry by the Narendra Modi Government in 2014.

But in Garg’s case, his appointment to the finance ministry and the subsequent elevation were both done by the Modi government.

Also read: Not seeking Rs 3.6-lakh crore reserve transfer from RBI, confirms Economic Affairs Secretary


  • The copy has been updated to incorporate Garg’s tweet confirming that he has indeed applied for voluntary retirement.

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  1. Few tears will be shed. I have been posting consistently that the economic team needs a rejig, some stardust, more cerebral economists of global stature. However, it was not expected that the Finance Secretary would be jousting so openly with institutions like the RBI, which is among the top central banks in the world. This desperation to fill gaping holes in the fisc. Just yesterday it was reported that the CAG has reported to the Finance Commission that the fiscal deficit for 2017 – 18 was not 3.4% but 5.8%. No one trusts our official statistics / data any more. This is unquestionably a difficult time for the economy. No one mandarin can be held responsible or accountable. However, as someone said of Jacqueline Kennedy after her husband’s assassination, Majesty is grace under pressure.

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